Stocks, peso fall amid rate cut hopes

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    Philippine stocks gained the most in Southeast Asia yesterday, boosted by hopes of a central bank interest rate cut.

    The country’s benchmark index jumped 0.5 percent after closing at its lowest in almost seven weeks on Monday.

    At the end of trade, the Philippine Stock Exchange index (PSEi) was down 63.82 points to 7,707.80, a 0.82 percent drop.

    Bangko Sentral ng Pilipinas governor Benjamin Diokno said another rate cut is still possible during the last policy meeting of the central bank in December.

    The BSP has cut interest rates by a total of 75 basis points this year but left its powder dry at the policy meeting held earlier this month.

    The possibility of another interest rate cut is underpinning the positive sentiment in the market, Rachelle Cruz, an analyst at AP Securities, said.

    The broader all shares index was down 27.18 points to 4,626.36, a 0.58 percent drop.
    The peso closed at 50.90 to the dollar, down from 50.755 on Monday. It opened at 50.72, hit a high of 50.66 and a low of 50.90.

    Trading turnover reached $1.3 billion.

    Chris Mangun, AAA Equities research head, said the market dropped on last minute selling “on heavy trading volume” as market continuously tracked the MSCI rebalancing.

    “We saw massive foreign outflows today with net-selling at P4.8 billion,” he added.

    Mangun said the index’s failure to hold the 7,750 support level “confirms that it wants to go lower and perhaps test the major support level at 7,500.”

    “The massive volumes t came in right before the close as foreign investors repositioned themselves in accord to the MSCI Philippine index. Investors may begin to pick up heavily battered companies as foreign selling may be coming to an end,” he said.

    Most actively traded Alliance Global Group Inc. was down P0.36 to P10.78. DMCI Holdings Inc. was up P0.01 to P6.56. BDO Unibank Inc. was steady at P150. Ayala Land Inc. was down P1.35 to P42.55. Aboitiz Equity Ventures Inc. was down P1 to P48.95.  SM Prime Holdings Inc. was down P0.30 to P38.90. Ayala Corp. was down P35.50 to P784.50. SM Investments Corp. was up P16 to P1,091. Bank of the Philippine Islands was down P3 to P87. Aboitiz Power Corp. was down P1.80 to P33.75.